Business activity across England and Wales hit an 18-month high at the end of last year in a further sign that the economy has so far shrugged off the effect of the Brexit vote.
Lloyds Bank’s regional purchasing managers’ index for December showed “strong and accelerated growth”, the lender said, led by the east of England, the southwest and the west Midlands.
Companies reported rising order books and employment growth, pointing to a promising start to 2017, Lloyds said in a survey styled as the “leading economic health check” for the regions.
England’s PMI rose to 57.2 from 55.8 in November, well above the recent low of 47.4 in July recorded after the vote to leave the European Union.
Wales, where the majority of voters plumped for Brexit, scored 57.4, outperforming the UK average for the seventh month running. Any reading above 50 signifies a growth in activity.
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The survey comes after Christmas trading statements from retailers last week, showing most had enjoyed stronger-than-expected festive sales.
Lloyds sounded a note of caution, however, over the post-Brexit vote effect of the falling pound, pointing to a “rise in price inflation”.
Tim Hinton, managing director of mid-markets banking at Lloyds, said: “The healthier order books suggest that the economy is starting 2017 with good momentum, but businesses will continue to be mindful of inflation and sustained pressure on their costs.”
Many economists have warned of a possible increase in inflation this year, while business and consumer confidence could take a knock once Theresa May triggers Article 50 to begin the formal process of leaving the European Union.
Joanna Elson, chief executive of the Money Advice Trust, the charity that runs the National Debtline, will say today that calls to the service were up 17 per cent in the first eight working days of January compared with last year.
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Research from the charity showed one in three Britons put their Christmas presents on credit, with an estimated 5.5 million expecting to fall behind on repayments. “With the UK economy entering a period of uncertainty it is important that households use the start of the year to take stock of their personal finances,” Ms Elson said.
BRC-Springboard figures show the high street enjoyed the first December rise in footfall for five years, up 0.8 per cent, though footfall was down 0.2 per cent overall, with traffic falling in retail parks and shopping centres.